Workers who have spent their whole
life in the PAYE system are suddenly expected to understand these, and
know when they are wrong. It’s like learning a new language late in
life.

The proposal to clarify tax codes is a
giant stride to making life easier. It will give pensioners a clearer
picture of how much tax they are paying, and help to spot mistakes
earlier.

It should also cut down on unexpected bills which many struggle to pay.

However, in calling for the end of the
10p rate of tax on savings income, the OTS is in danger of stripping
away benefits from pensioners at a time when their incomes are already
severely squeezed – as it did when it proposed the removal of higher
tax-free allowances for the over-65s, a policy that became known as the
‘granny tax’.

The OTS says the 10p rate is too
complex, and that the £50million it costs should be spent on higher Isa
allowances for everyone.

However, 525,000 save an average of
£90 a year because of the 10p rate. Scrapping it would mean taking cash
from pensioners, and sharing it with everyone else. That is no reward
for a lifetime spent saving.

Hopefully, the Chancellor will realise
that on this occasion, simpler is not better, and reject another
stealth tax hike on the prudent.